Brexit: what happens next?

This week – of all weeks – there was only one topic to write about. The question on everybody’s lips.

“What happens next?”

After a tumultuous few years of political predictions, I now try to think about processes rather than simply go with gut instinct when making predictions. To that effect, I hope the following rough guide will help you navigate what could be a rather confusing few weeks for us all.

1. The meaningful vote

Set to take place on Tuesday 11th December, this is a straightforward majority vote in the House of Commons on the proposed Brexit withdrawal agreement. There are growing murmurings from both the Cabinet and the backbenches that the vote may be delayed by the Prime Minister if it is clear that the Government is set to suffer a heavy defeat.

If the vote does go ahead, the Government is widely expected to lose. However, should Theresa May manage to pull a rabbit out of her hat then the terms of the UK’s withdrawal from the EU will have been formally agreed ahead of our departure on 29th March. The next phase of Brexit would be a transition period until the end of 2020 whilst we negotiate our future trade relationship with the EU.

However, if as expected the Government loses the vote, the Prime Minister would be required to make a formal statement to Parliament within 21 days setting out next steps (eagle-eyed readers will note that this deadline happens to fall on New Year’s Day). Following the dramatic events of Tuesday, when the Government lost three votes in one day, MPs will now have the power to amend the Government’s formal statement setting out next steps, potentially altering the Government’s position on Brexit.

2. Resignation? Renegotiation?

If the government loses the vote, the immediate focus will be on the scale of the defeat. A loss of 100+ could well be fatal and the Prime Minister may resign on the spot, triggering a Conservative leadership election.

If the margin is say 50 or less, the Prime Minister may choose to fight on and seek further concessions on the backstop arrangement at the European Council meeting on 13th & 14th December. However, the prospect of securing further concessions is thought to be highly unlikely, given the domestic problems faced by the leaders of France, Germany and Italy to mention but a few.

3. Leadership challenge or General Election?

If the Prime Minister does resign, there will be a leadership contest within the Conservative Party. MPs vote on their preferred candidate until two remain, before party members have the final say. If she does not resign, it seems likely there will be more talk of ‘48 letters’ as Conservative MPs consider submitting letters of no confidence in the Prime Minister. If this number is reached, there is a secret ballot of Tory MPs to vote on whether they wish to see Mrs May remain as Party Leader. If she wins, she is then exempt from further Conservative leadership challenges for 12 months, perhaps explaining why the plotters have yet to take the plunge – mindful they will only get one shot at ousting her. the If she loses, she must resign and there is a leadership contest as above. Who would act as PM in the interim is unclear.

Labour’s stated aim is to force a General Election. The mechanism they are likely to pursue involves calling a vote of no confidence in the Government, under the Fixed Term Parliament Act. If the Government wins the vote, they continue. If they lose, there is a 14-day period in which attempts will be made to form a government that can command a majority in the House of Commons, possibly referred to as a ‘Government of National Unity’. If no government can be formed after 14 days then a General Election will be called.

4. No Deal or No Brexit?

It is impossible to say at this stage whether there will be No Deal, an extended transition period or even a second referendum. That said, there seems to be a majority in the Commons who oppose a No Deal, the Prime Minister has repeatedly ruled out a second referendum and Labour doesn’t seem to know what it really wants. Clear as mud.

Where does this leave us? In short, no one knows and anyone who professes they do is pulling your leg. Business in this country has had to ensure a prolonged period of uncertainty and my fear is this will continue for some time to come. So my humble advice to the businesses community is this; focus on delivering the investment, building the homes and creating the jobs this country depends on regardless of the outcome.

As ever, the Quatro team will be talking to those involved and monitoring what happens over the coming week. If you have any questions, drop us a line or, better yet, let’s discuss the whole tangled mess over a festive drink. I certainly could use one right now!